Lawyers advertise for Glaxo claimants

Lawyers have stepped up television advertising aimed at patients who could
file a claim having suffered ill effects from Avandia amid intense scrutiny
of the safety of GlaxoSmithKline (GSK)'s diabetes drug.

By Rachel Cooper

10:00PM GMT 30 Jan 2011

Figures from Kantar's Campaign Media Analysis Group show that in 2009, there were more than 33,000 airings of Avandia-related adverts in America, valued at $6.5m (£4.1m). But last year, that rose to 52,000 airings at a value of $14.8m.

Avandia has been mired in controversy since 2007 when a study claimed it could be linked to increased risks to the heart.

GSK has always vigorously defended the drug but last year the US Food and Drug Administration placed major restrictions on Avandia and European regulators said the diabetes pill should be withdrawn from the market.

With the spotlight once again on the drug's safety, GSK has seen a rise in lawsuits relating to the drug. In July, GSK announced a £1.57bn legal charge, covering a number of issues and said it had settled the substantial majority of cases relating to Avandia.

But, earlier this month, the company revealed that in the fourth quarter, it had put aside a further £2.2bn to cover legal costs, partly relating to claims regarding Avandia. GSK said it had received a "substantial" number of new claims.

Its fourth-quarter profits will be effectively wiped out by the legal charge and when GSK posts its results on Thursday, full-year profits are expected to have decreased to £4.6bn from £7.9bn the previous year. Sales are expected to have increased slightly to £28.4bn.

Navid Malik, an analyst at Matrix, said he imagined that the provisions put in place by GSK this year deal with the bulk of the litigation risks going forward.

"While there has likely been an increase in legal advertising related to gathering plaintiffs in the US for Avandia – this typically happens in the US – I am wondering whether the negative news since 2007 has already flushed out many of the plaintiffs," he said.

"It is possible that lawyers may gather more interest from new plaintiffs but I don't think the floodgates are about to open."